Singapore Is Relatively Cheap, But Only Moderately Attractive

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Singapore

Four Pillars of GDP: Driven by the private sector

Singapore has moderate GDP growth, driven mainly by private investments and private consumption. Net export was a drag on GDP growth in the past four quarters.

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See 2017 Hedge Fund Letters.

PE and growth for Singapore look attractive relative to ASEAN

Singapore’s 2018CE* 13.9x PE is in line with Asia ex Japan and below ASEAN. EPS growth is in line with Asia ex Japan for 2018CE* but above ASEAN. Nice dividend yield, only Taiwan has higher in Asia.

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InvestorsDuring the bull market, small caps haven't been performing well, but some believe that could be about to change. Breach Inlet Founder and Portfolio Manager Chris Colvin and Gradient Investments President Michael Binger both expect small caps to take off. Q1 2020 hedge fund letters, conferences and more However, not everyone is convinced. BTIG strategist Read More

A. Stotz Four Elements: Singapore’s rank relative to Asia

Overall, Singapore appears moderately attractive in Asia considering all our four elements: Fundamentals, Valuation, Momentum, and Risk.

Fundamentals: Poor ROE, only Hong Kong has lower ROE in Asia.

Valuation: Cheap on PB and second highest dividend yield in Asia.

Momentum: Decent price momentum and earnings growth in line with Asia.

Risk: Moderate risk in Singapore.

Massive price return in Info Tech, Telecom still challenged

Top 3 largest sectors: Industrials: 26% of the market; Financials: 24%; Real Estate: 22%.

Best sector & stock: Information Technology: +40.6% & Hi-P International Ltd: +49.8%.

Worst sector & stock: Telecom: -7.6% & StarHub Ltd: -13.6%.

*CE is consensus estimates.

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Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.